We're still in the early stages of this trend, but it's pretty clear that the green energy sector is fast becoming a venture capital darling. Today, for example, five deals were announced in one publication alone (three VC, two acquisitions). The three investments account for $47.4 million in VC investment. And only yesterday, Solazyme picked up another $57 million in its Series C round.
In what remains a capital-constrained market, the cash is still flowing. In the private equity space, investments in clean technologies have remained steady from 2007 to 2008, despite broader economic calamity. Such commitment this early in the game may hint at what the next bubble will be.
VantagePoint Venture Partners, which has been busy lately, led a Series C round of financing for Tendril. The company has developed a hardware and software solution that facilitates the optimization of energy supply and consumption. The idea was solid enough, apparently, to warrant a $30 million round. Meanwhile, Semprius received a $6.4 million Series B round from ARCH Venture Partners, Applied Ventures, and others. Semprius is developing low-cost, high-performance solar modules for utility scale power generation. And, Axis Private Equity has invested in Shalivahana Green Energy Limited, which focuses on biomass and small hydro power projects.
Two acquisitions have been announced as well, as existing players seek to capitalize on new technologies and market opportunities. Oilcorp Berhad is planning to pick up Renewable Fuel Corp, a biodiesel manufacturer, for $22 million. And, Premier Power Renewable Energy is adding to its European solar energy market presence with the acquisition of Arco Energy, a privately held Italian solar project developer and distributor. Arco has more than 20MW of permitted projects with an estimated potential revenue of $114 million.
Deal flow is showing a brisk pace in the green energy space, and the financial support appears to be more than merely opportunistic. Green energy is attracting investment even in a difficult market. Expect this trend to continue. Unlike the many, many other green initiatives being touted -- from environmentally product packaging to employee volunteer programs -- green energy, if executed properly, should not require a change in behavior. Requiring people to act differently is the death blow to any green program.
Green energy reduces carbon footprint before it is consumed, so the user can leave the television on when leaving for work and not be responsible for the emissions. So, clean energy technologies have a better shot than other green initiatives. This potential is what is likely to accelerate interest (and investment in the sector). This, of course, means that we'll all lose restraint at some point, pumping up the sector. We all know what follows that ...
May we all hope that, as this trend gains momentum, commercials with sock puppets are not produced.
